West Central MN (between MMF and Larson's) | You do a basis contract when basis is really good. Oftentimes that’s when futures prices are not good.
Flat price sellers aren’t moving grain when futures are crappy ( unless they get wore down and start puking bushels) so end users or buyers need to make basis better to keep bushels coming.
Oftentimes when the board starts going up the flat price sellers will move grain. Then buyers will start widening basis’ since they “are getting enough bought “ ie the board is doing the work so basis doesn’t have to as much.
HTA’s have a place for some
Basis contracts have a place for some
We prefer using a futures account to an HTA as it’s usually hard to get a decent basis bid once they have you locked in via an HTA. ( they have no incentive on basis since you committed already)
Per usual, there are few absolutes. Find tools you’re comfortable with and work your plan.
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Why Basis contracts?
